Daily Record Financial News &
Monday, May 25, 2015
Vol. 102, No. 136 • Two Sections
35¢ www.jaxdailyrecord.com
Paying the price for bad contracts By Carole Hawkins Staff Writer When a TV ad shows a man in a lab coat promoting a new prescription drug, viewers realize the “doctor” is being paid to recommend it. But, when a Realtor recommends a lender or title company to their client, the client likely assumes the Realtor isn’t being paid by the companies to give that advice. Sometimes he or she is. And the consumer is often the one paying for the illegal practice.
The Consumer Financial Protection Bureau is pursuing title, mortgage and real estate companies that give or receive incentives for customer referrals. The practice is illegal under Section 8 of the Real Estate Settlement Procedures Act. The law prohibits real estate professionals from receiving anything of value in return for referring settlement service business. “Realtors and brokers have a fiduciary duty to clients,” said Fred Ahern, an attorney who practiced real estate law 30 years in Northeast Florida before retir-
ing in 2011. “The vast majority of consumers are not familiar with what goes on and rely completely on their Realtor.” In 2011, the consumer protection bureau took over enforcement of the act from the Department of Housing and Urban Development. Since then, it has racked up 11 lawsuits and settlements for illegal kickbacks. It’s been a wake-up call to the industry. The National Association of Realtors recently offered training to members on illegal referrals. Contracts... Continued
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Photo by Carole Hawkins
Homebuyers often unaware of deals
A federal agency is racking up lawsuits nationwide against real estate companies that get or give illegal kickbacks for mortgage referrals. In Northeast Florida, such referrals have been part of the industry for two decades, said Fred Ahern, a retired real estate attorney.
Jobless report ‘really good’
A duty they’re honored to perform
Construction jobs on the increase
Marine veteran James Donnelly and his wife, Joanna, volunteer each year to help place flags on the graves at the Jacksonville National Cemetery in time for Memorial Day. Donnelly said Saturday the couple will continue the tradition “until we can’t.” See more photos on Page A-9.
Photo by Bobby King
By Mark Basch Contributing Writer
Stein Mart earnings lower than expected Stein Mart Inc. last week reported lower-than-expected first-quarter earnings, in part because of interest expenses related to a special dividend paid to shareholders in February. The Jacksonville-based fashion retailer reported adjusted earnings of 31 cents a share for the first quarter ended May 2, a penny lower than last year’s first quarter and 3 cents lower than the average forecast of analysts surveyed by Thomson Financial. Stein Mart said earnings were lowered by a penny a share because of $600,000 in additional interest costs from borrowings used to help pay the special $5-a-share dividend in February. Earnings also were lowered by the timing of certain events which reduced its
Public
profit rate in the first quarter, but will have a positive impact in the remaining three quarters of the year, it said. Stein Mart had previously announced that total sales for the first quarter rose 7.5 percent to $353.5 million and comparablestore-sales (sales at stores opened for more than one year) rose 4.8 percent. “Our customers are truly responding well to our merchandise this spring,” CEO
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Jay Stein said in a conference call with analysts. Chief Financial Officer Gregory Kleffner said sales were helped by Stein Mart’s fledgling e-commerce business. Online sales doubled and contributed 0.8 percentage points to the comparable-store sales gain in the first quarter, he said. Stein Mart, which operated 270 stores at the end of the quarter, said it altered its store opening plans for the year as one planned opening in California was moved from the fall to the first quarter next year. That means the company intends to open 10 new stores this year, instead of its previously announced plan for 11, while closing three. Stein Mart’s stock fell to a two-year low Basch... Continued Page A-11
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Jacksonville’s unemployment rate dropped in April, with a pickup in construction activity helping to add jobs in the region. The jobless rate for the Jacksonville metropolitan area — Duval, Baker, Clay, Nassau and St. Johns counties — fell from 5.5 percent in March to 5.1 percent in April, the Florida Department of Economic Opportunity said Friday. The state agency does not adjust that data for seasonal factors but according to the University of North Florida’s Local Economic Indicators Project (LEIP), when the data is seasonally adjusted, it shows the unemployment rate dropped from 5.62 percent to 5.3 percent in April. “All the news is really good,” said UNF economist Paul Mason. “I still wouldn’t call this full employment, but I think it’s getting closer,” he said. Mason said one factor helping the area’s economy grow has been an increase in building permit activity, which appears to be generating more construction jobs. The Department of Economic Opportunity reported that construction firms in the Jacksonville area added 1,200 workers in April and over the past 12 months, construction employment is up by 2,000 jobs, a 6.3 percent increase. That’s the largest growth rate of any major industry sector in the area, but the leisure and hospitality sector is close with a 6.1 percent growth rate in the past year. Total non-agricultural employment in the Jacksonville area has grown by 16,500 from April 2014 through April 2015, a 2.7 percent growth rate. Unemployment... Continued
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